On-line payment service providers make payments on behalf of payors to payees. In making a payment on behalf of a payor, an on-line payment service provider debits a deposit account belonging to the payor and issues a credit to the payee, either electronically, by check drawn on an account belonging to the on-line service provider, or by draft drawn from the payor's deposit account. It will be understood by one skilled in the art that drafts serve as both the debit and the credit vehicle.
A payor must register with an on-line payment service provider to access services offered by the on-line payment service provider. The registration process, which can be either on-line, typically via the World Wide Web, or by paper forms, includes the payor (registering customer) providing information identifying a demand deposit account, such as a checking account, belonging to the payor to the on-line payment service provider. This identifying information includes a unique routing and transit number (RTN), which identifies the financial institution at which the deposit account is maintained, as well as a unique account number (DDA) identifying the payor's deposit account maintained at the financial institution. Together, this information is known as RTN/DDA information, and alternatively RT/DDA information.
For both on-line and paper registration, the registering customer has conventionally been required to supply the on-line payment service provider a voided check from the deposit account. This voided check is used as a fraud prevention measure to authenticate the association between the registering customer and the deposit account. Thus, in conventional enrollment, a registering customer has not been able to immediately direct an on-line payment service provider to make payments on his or her behalf, as the voided check must physically be delivered to the on-line payment service provider, and then the voided check must be authenticated by a customer service representative of the on-line payment service provider.
Recently, new completely on-line and real-time registration techniques have been introduced. In one, a trusted agent, typically a consumer service provider (CSP), guarantees to indemnify an on-line payment service provider against fraud committed by a registering customer that the CSP represents. No attempt is made by the on-line service provider to authenticate the association between the registering customer and that registering customer's deposit account.
In another completely on-line and real-time registration technique, the registering customer's identity is verified, by leveraging one or more commercial databases, while the registering customer is participating in an on-line registration session. While the registering customer's identity is verified, an association between the registering customer's deposit account and the registering customer is not authenticated. At most, the on-line payment service provider can be assured that the registering customer is who he or she purports to be. Based upon a verified identity, on-line payment service providers have found that there is less chance of the registering customer providing fraudulent information identifying a deposit account. These two techniques each allow a registering customer the convenience of immediately directing payments.
In both of these completely on-line and real-time techniques, a registering customer is required to enter RTN/DDA information. As the registering customer is not required to supply a voided check, the sole source of this information is the registering customer. On-line payment services have found that registering customers often make mistakes in entering these numbers. On-line payment services, in rectifying these unintentional mistakes, incur customer service costs. In addition, fraudulent deposit account identifying information is also still received under both completely online registration techniques. Even when a CSP indemnifies an on-line payment service, costs are still associated with the fraud.
Other new registration techniques have also been introduced. These techniques are not completely on-line or real-time. In one technique, a financial institution at which a customer's account is maintained supplies RTN/DDA information. While an association between a customer and an account is authenticated because the financial institution itself supplies RTN/DDA information, this does not occur during an on-line and real-time enrollment session with a customer. In another technique, a registering customer provides RTN/DDA information during an on-line session. Subsequent to the session, a service provider makes one or more small debits and/or credits, via electronic funds transfer, from/to the customer's account. The customer then determines the amount(s) and initiates another on-line session with the service provider and identifies the amount(s) to the service provider. If the customer supplied amount(s) is/are correct, the service provider has a high level of confidence that the account is actually associated with the registering customer. However, the enrollment process can not be completed fully in a single session, as the consumer must take some action (determining the amount(s)) subsequent to an initial registration session.
Accordingly, a need exists for an on-line and real-time technique to authenticate an association between a registering customer and a demand deposit account which mitigates occurrence of both incorrect entry of RTN/DDA information and fraud.
Some on-line payment services access more than one commercial database in the registration process in attempting to locate information used to authenticate a registering customer's identity (not to authenticate an association between a customer and a deposit account). Often an on-line service provider must access multiple commercial databases before useful information is found. These commercial databases charge for access, making this an expensive process.
Accordingly a need exists for a technique for registration for electronic commerce service which minimizes costs associated with utilizing information belonging to an entity other than an electronic commerce service provider.